India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
3QFY2011 Result Previews
TCS
TCS is set to announce its 3QFY2011 results. We expect the company to post revenue of
US $2,158mn with 7.7% qoq growth on the back of volume growth of 7.0% and
cross-currency benefit of 0.7%. In INR terms, revenue is expected to grow by 4.2% qoq to
`9,680cr. EBITDA margin is expected to decline by 31bp at 29.7%, as drop in utilisation and
INR appreciation against USD may take away productivity gains. PAT is expected to be at
`2,197cr, with 4.3% qoq growth. TCS remains to be our preferred pick amongst Tier-I IT
companies due to its strong capabilities in the financial services verticals with a broad service
portfolio and diversified geographical presence. At the CMP of `1119, the stock is trading
at 23.2x FY2012E EPS of `48.3. We recommend Accumulate on the stock with a
Target Price of `1,208.
L&T
Larsen & Toubro (L&T) is expected to announce its third quarter results. We expect L&T to
record revenue of `10,202cr, a substantial jump of 26.4% yoy. For FY2011, management
has guided for 20% yoy growth in revenue, which implies growth of ~27% in 2HFY2011.
On the EBITDA front, we expect margins to be flat at 11.3% as against 11.8% in 3QFY2010.
We project net profit at `720cr, a modest increase of 3.4% yoy primarily due to higher
interest cost. We recommend Buy on the stock with a Target Price of `2,024.
Axis Bank
Axis Bank is slated to announce its 3QFY2011 results today. We expect the bank to report
healthy NII growth of 24.0% yoy to `1,674cr. However, NIMs are likely to remain flattish on
a sequential basis. Non-interest income is expected to increase at a slower pace at 7.6% yoy
to `1,063cr, on account of lower treasury gains. The cost-to-income ratio is expected to
increase to 43.0% from 41.2% on a yoy basis. The pre-provision profit of the bank is
expected to register growth of 13.5% yoy. However, net profit is expected to increase by
27.5% on a yoy basis to `837cr on account of lower provisioning expenses.
Post the sharp correction in the stock, it is trading at attractive valuations of 2.3x FY2012E
ABV – more than 30% discount to HDFC Bank, despite similar earnings quality, profitability
and growth expectations over FY2010–12. Hence, we maintain a Buy recommendation on
the stock with a Target Price of `1,678.
Rallis India
Rallis India is scheduled to announce its 3QFY2011 results. We expect the top line to witness
growth of 25% yoy to `254cr on the back of rising agro-commodity prices fuelling demand
for agri-inputs from farmers. The operating margin is expected to reduce by 110bp to 20%,
aided by higher commodity prices and higher other expenditure on account of new product
launch. Consequently, the company’s net profit is expected to grow 33% yoy to `32cr.
Currently, we have a Neutral recommendation on the stock; we would review it post result
and management meet.
No comments:
Post a Comment